Some detractors claim supplemental tax is illegal

WOONSOCKET – A protest movement appears to be forming around the belief that the Budget Commission broke the law on July 8 when it approved a resolution to impose a $2.5 million supplemental tax on property and motor vehicles.
The concept was repeated often and loudly as members of the commission gathered in Harris Hall Monday for the first time since passing the resolution a week earlier.
The meeting drew a crowd of about 50, many of whom cheered vigorously each time one of the spectators raised the issue.
The nub of the argument is that the commission did not meet the benchmarks established by state lawmakers as prerequisites for the issuance of the supplemental tax bill. State lawmakers approved enabling legislation allowing the commission to move forward with the tax only if they achieved no less than $3.75 million in savings from cuts in health care benefits from active employees and retirees.
“The legislation is crystal clear,” said James Cournoyer, one of the commission’s sharpest critics. “We have not accrued or earned these savings yet.”
State Sen. Marc Cote (D-Dist. 24, Woonsocket, North Smithfield) was one of the state lawmakers who voted in favor of the enabling legislation. He, too, approached the lectern and accused the commission of misapplying the law.
Cote said the commission passed a resolution affirming that employee concessions and so-called enactments affecting retirees would achieve some $4.7 million in savings in fiscal 2014. But the commission wrongly includes some $2.7 million in the calculus because the figure reflects cuts in health benefits for police and fire department retirees that are now the subject of a legal challenge.
The suit alleges the cuts were made without collective bargaining. The city is ultimately bound to lose that case because state law forbids employers from changing contracts in the absence of bilateral negotiations, according to Cote.
“You are claiming $2.7 million in savings that are in question,” the senator said. “I sincerely believe you are in violation of the enabling legislation.”
Another detractor, Roland Michaud, likened the commission’s plan to the one espoused by the 1950s cartoon character Wimpy, who used to beg lunch money with the familiar promise, “I will gladly pay you Tuesday for a hamburger today.”
“You know what?” he snapped into the microphone. “I don’t want to buy you a hamburger today.”
Members of the commission endured the angry fusillade without comment.
After the hearing, however, City Council President John Ward, a member of the commission, said two lawyers have already issued formal opinions that the panel’s actions are legal. Ed Alves, the commission’s legal counsel, and Daniel Kinder, an outside attorney spearheading labor negotiations for the city, both agree that the supplemental tax bill was passed in a manner that is in harmony with the enabling legislation approved by state lawmakers.
“They have indicated to us that we are on solid legal grounds with regard to the supplemental tax bill and the statutory authority of the budget commission,” said Ward.
Mayor Leo T. Fontaine said Cote’s opinion is not universally shared by members of the legislative delegation.
“There are other members of the delegation who believe we’ve met the requirements,” said Fontaine, identifying State Sen. Roger Picard (D-Dist. 22, Woonsocket, Cumberland), as one of them.
Whether the protest evolves into a bona fide legal challenge remains to be seen. During a break in the hearing, Cote would not make any predictions.
Tax officials say the 2013 supplemental tax bills will go out in the mail next week. The bill raises a one-time-only extra assessment on motor vehicles of 14.8 percent, and real estate, 4.7 percent, excluding single-family homes and condos.
But regular 2014 tax bills that will go out in the mail this week will also reflect the effects of the supplemental, which is added to the entire tax base retroactively. The compounded effects of the supplemental, a 4 percent hike in taxes for fiscal 2014 (which began July 1), plus a sharp rollback in the homestead exemption, will result in a property tax hike of roughly 23 percent on the average homeowner, officials say.
Follow Russ Olivo on Twitter @russolivo